…Says affiliation has outlived usefulness
Femi Otedola, famend philanthropist, yesterday waded into the continued gas provide disagreement between the Dangote Refinery and the Depot and Petroleum Merchandise Entrepreneurs Affiliation of Nigeria (DAPPMAN), advising the affiliation to innovate or perish.
The enterprise mogul harassed that he had adopted the controversy across the gas provide points between each events not too long ago, noting that he felt compelled to supply some perspective, particularly because it pertains to the way forward for the nation.
In an announcement on current points within the oil and gasoline sector, particularly within the downstream, Otedola additionally congratulated Aliko Dangote on the success achieved up to now since his refinery commenced operations, describing it as a historic leap for Nigeria’s vitality independence and financial future. Otedola posited that Nigeria stays threatened by entrenched cabals who nonetheless consider they will resist change, however maintained that historical past has proven repeatedly that change can solely be delayed, however by no means halted. Taking place reminiscence lane, Otedola recalled that he based DAPPMAN 23 years in the past, particularly in 2002, with a transparent mission to problem the dominance of the key entrepreneurs and provides impartial depot house owners a good platform to thrive.
In accordance with him, on the time, the affiliation aimed to fill crucial provide gaps left by an inefficient downstream system. Nonetheless, he emphasised that since then, instances have modified, with most of the unique gamers having exited the scene, and people left, clinging to belongings that now not mirror right now’s enterprise realities.
“However historical past has proven repeatedly: you may delay change, frustrate it, even sabotage it however you may by no means cease it. I based DAPPMAN in 2002 (23 years in the past) with a transparent mission, to problem the dominance of the key entrepreneurs and provides impartial depot house owners a good platform to thrive.
“I personally structured the group, appointing the late George Enenmoh, then managing director of Ascon Oil, as chairman, whereas I served as vice chairman and Sayyu Dantata as secretary. On the time, depot possession was strategic. We had been filling crucial provide gaps left by an inefficient system.
“However instances have modified. Most of the unique gamers have exited the scene, and people left are clinging to belongings that now not mirror right now’s enterprise realities . I suggested a few of them way back to final yr to promote their depots as scrap whereas they nonetheless had worth. Nigeria now has over 4 million metric tons of storage capability, most of it idle. With the Dangote Refinery now supplying gas domestically, the outdated enterprise mannequin is crumbling.
“Zenon Oil pioneered the trendy diesel enterprise in Nigeria and grew to turn out to be the biggest provider within the nation. We constructed depots to retailer our imported diesel as a result of the market was import-driven and riddled with inefficiencies. However with Dangote’s refinery absolutely operational, these gaps now not exist.
Learn additionally: Dangote Refinery Vs DAPPMAN: CORAN calls for calm, restraint, collaboration among oil industry stakeholders
“We now have home manufacturing and native provide environment friendly, dependable, and proudly Nigerian. Moreover, we should not fail to recognise the attendant advantages of eliminating the grid lock across the Ibafon, Tincan and Apapa areas as a result of operations of the Dangote Refinery,” Otedola argued.
At the moment, extra than simply producing gas, Otedola famous that Dangote has elevated your complete logistics chain, buying 8,000 model new CNG eco-friendly vehicles that may distribute throughout the nation with much less air pollution and fewer breakdowns, not like the ageing, rickety vehicles nonetheless utilized by some operators. He added: “I do know this enterprise intimately. I used to be king of it and on the peak of it in 2005 (20 years in the past), I used to be conferred with the life patron of the PTD (Petroleum Tanker Drivers) union by Mr Akinlaja. So, once I say the sport has modified, I communicate from deep expertise.
“What’s DAPPMAN combating for right now? To protect a mannequin constructed on gas imports, subsidy exploitation, and outdated infrastructure? That period is quick disappearing. The establishing of depots was primarily to gather PFIs. No depots, no PFIs (Professional Forma Invoices) from NNPC who had been sole suppliers of gasoline (petrol) on the time and which thus led to the breeding of complacent importers whose sole agenda was on arbitrage and subsidy margins.” Since there aren’t any extra PFIs, the businessman argued that there isn’t any cause why the Dangote Refinery ought to subsidise DAPPMAN with N1.5 trillion which they’re asking Dangote Refinery to pay and subsequently move this price to shoppers.
Whereas saluting the braveness of Dangote in bringing about transformative change within the downstream sector, Otedola emphasised that the parable that depots generate huge employment was unfaithful. “Depots don’t drive employment as some declare. A typical depot employs maybe 5 folks, gatekeeper included. In distinction, a single filling station can present jobs to dozens of Nigerians—from pump attendants to cashiers, safety personnel, and cleaners. “If something, DAPPMAN members needs to be specializing in proudly owning and scaling last-mile stores, not holding on to tanks constructed for a gas import economic system that now not serves us,” he acknowledged.
Taking a cue from the worldwide image, Otedola identified that depots in Amsterdam or Houston had been designed to serve export markets, particularly Africa, however that with Nigeria now refining domestically, such infrastructure is more and more pointless. “The identical factor occurred within the cement trade. As soon as Nigeria began producing cement domestically, the majority carriers that used to dock at our ports had been retired, many bought as scrap. The identical end result awaits gas depots,” he mentioned. If DAPPMAN members don’t adapt, Otedola argued that they won’t solely turn out to be irrelevant, however they could go bankrupt. As a substitute of resisting progress, he urged them to contemplate promoting, restructuring, or investing in new worth chains, explaining that if they honestly consider in competitors, they may even come collectively and purchase the Port Harcourt Refinery and see if they will succeed the place NNPC couldn’t. Even in developed markets, he acknowledged that refinery operators are downsizing their depot footprint, with many changing them into bonded warehouses or exiting utterly and mentioning the case of the Folawiyo Group, recognized for its foresight and integrity, which bought its depot and exited early. “That’s strategic pondering,” he posited. “DAPPMAN had its place however right now, its relevance is quick fading. We should cease clinging to outdated privileges and give attention to a brand new period constructed on self-sufficiency, transparency, and sustainable worth creation. Aliko’s refinery will not be the issue. It’s the resolution. Let’s transfer ahead,” he acknowledged.
He famous that credit score should go to President Bola Tinubu for doing what no different chief earlier than him had the political will to execute, which is the complete deregulation of the downstream petroleum sector. This singular act, he mentioned, has damaged the grip of entrenched pursuits and ushered in a brand new period of transparency, wholesome competitors, and customer-centric service supply. “In a sector lengthy stricken by rent-seeking, subsidy fraud, product diversion, and smuggling, this reform marks a decisive break from the previous and lays the inspiration for a extra environment friendly and accountable vitality market. But regardless of this progress, there are nonetheless voices clinging to the outdated methods. Voices decided to withstand change, even when it’s clear the tide has turned,” Otedola wrote.
Apart from, Otedola mentioned that as much as N2 trillion was siphoned in questionable gas subsidy claims beneath the Goodluck Jonathan administration, narrating how he warned the ex-president about fraudulent oil entrepreneurs on the time. The philanthropist maintained that every one these fraudulent subsidy claims had been tied to depot licenses, noting that the coverage rewarded neither transparency nor innovation, however inspired rent-seeking and corruption.
